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Investigations

WMATA Pays More Than $4.2 Million to Resolve False Claims Act Violations

On August 20, 2014, the Washington Metropolitan Area Transit Authority (WMATA) paid the United States $4.2 million. The funds were paid to resolve allegations that WMATA filed false claims in connection with using Federal Transit Administration (FTA) funds to impermissibly award a contract for a financial management information technology project without using competitive procurement procedures.

In August 2009, WMATA awarded Metaformers, Inc., a Virginia based business, using competitive procedures, a contract valued at approximately $256,000. The contract was to assess WMATA’s financial system. Less than one year later, in July 2010, WMATA awarded Metaformers a $14 million contract to integrate their financial and business systems. WMATA awarded the contract non-competitively and allegedly without legitimate justification for doing so, foreclosing an opportunity for other contractors and companies to submit proposals for the lucrative project. WMATA’s conduct was allegedly in violation of its certification, and commitment, to administer the FTA grant funds using full and open competition.

In awarding the $14 million integration contract, WMATA also allegedly violated "conflict of interest rules" governing use of FTA grant funds. WMATA’s noncompetitive award to Metaformers was based, in part, on the work previously completed by them under the assessment contract. By competitively awarding the smaller assessment contract and then non-competitively awarding the far more lucrative integration project to the same contractor, WMATA violated federal procurement conflict of interest rules. Their actions gave one contractor an advantage over others who might have been interested in competing for the integration project.

The settlement resolves a qui tam, or whistleblower, lawsuit filed on behalf of the government by a former WMATA employee, under the qui tam provisions of the False Claims Act. The Act allows private citizens to bring lawsuits on behalf of the United States and share in any recovery obtained by the government. The whistleblower will receive approximately $996,000 as a share in the recovery.

We conducted this investigation with the Commercial Litigation Branch of the Department of Justice Civil Division, the District of Columbia U.S. Attorney’s Office, with assistance from FTA.

Note: The claims settled by the agreement are allegations only, and there has been no determination of liability. Additionally, the settlement agreement is not based on any allegation that Metaformers, Inc. engaged in any wrongdoing.